I Have One Word for You: Blockchain

December 21, 2017

Vaughan Emery

T’is the season for watching classic movies. And one classic that has been coming to mind is “The Graduate” – the 1967 Oscar winning flick that gave birth to Dustin Hoffman’s career, produced the hit Simon & Garfunkel song “Mrs. Robinson” and launched an ironic meme before there were memes.

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That meme, of course, is the advice Hoffman’s character is given at his college graduation party, by Mr. McGuire, a well-meaning adult, trying to set the graduate on the right path in life. With dramatic flourish he offers this advice: “I just want to say one word to you. Just one word. Are you listening? Plastics!”

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While certainly not wanting to come across like the terminally square, Mr. McGuire, his line comes back to me a lot when I think about what the world of business needs today, and will continue to need well into the future. Today, Mr. McGuire would hopefully say: “Just one word. Are you listening? Blockchain!”

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The New York Times caught the future potential of the technology with this recent headline: “Blockchain: A Better Way to Track Pork Chops, Bonds, Bad Peanut Butter?”

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The Wall Street Journal provides another example of why blockchain will soon be used throughout all businesses with this headline: “Blockchain Will Save Billions in Compliance Costs.”

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And Cointelegraph captured the response from universities with this headline: “Blockchain Courses in Universities: A New Supply for a New Demand.”

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Mainstream articles about the growing demand for blockchain frequently begin with an apologia of sorts… explaining to readers that blockchain is the technology that underlies Bitcoin, and yes, Bitcoin had rather a dodgy reputation early on as the currency of hackers and others seeking to skirt the law… before cutting to the car chase: The whole world needs blockchain, and this represents a technological revolution.

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The New York Times, in its article about moving pork chops, captured the value of blockchain’s immutable distributed ledger in this description of why the container cargo shipping company Maersk was so eager to adopt the technology:

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“For Maersk, the problem was not tracking the familiar rectangular shipping containers that sail the world aboard its cargo ships – instead, it was the mountains of paperwork that go with each container. Maersk had found that a single container could require stamps and approvals from as many as 30 people, including customs, tax officials and health authorities.

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“While the containers themselves can be loaded on a ship in a matter of minutes, a container can be held up in port for days because a piece of paper goes missing, while the goods inside spoil. The cost of moving and keeping track of all this paperwork often equals the cost of physically moving the container around the world.

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“What’s more, the system is rife with fraud. The valuable bill of lading is often tampered with or copied to let criminals siphon off goods or circulate counterfeit products, leading to billions of dollars in maritime fraud each year.”

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Writing in Fortune, Howard Yu, Professor of Strategic Management and Innovation at IMD, sees blockchain as the biggest banking innovation in more than a century, noting: “The last time some real innovation occurred was in 1871, when Western Union – a telegraph company – introduced a proprietary system that achieves near real-time money transfer.”

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Yu writes: “Blockchain, it turns out, is just a universal banking protocol – a big idea to be sure, much like the Internet protocol that ushered in the World Wide Web. Everything blockchain needs is already here, from mobile phones to embedded sensors, from raw computing power to machine algorithms. The greatest achievement of Satoshi Nakamoto, the mysterious inventor of Bitcoin, is to commit such an elegant design of a decentralized monetary system to paper that it inspired waves of hackers, technologists, and bankers to experiment in a number of different ways.”

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The world needs blockchain because it needs an immutable ledger of things for just about everything.

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The coming decades will see wave after wave of blockchain-based solutions being introduced across the world of business and beyond. And many of these applications will involve the need for securely interacting with the Internet of Things and autonomous machine-to-machine transactions.